Tax revenue for October was down 2.8% - but the corporate tax take is well above forecasts.
The latest monthly government financial statements, for the four months to October, show drops in both personal income tax flows and GST tax take.
Offsetting this, though, is a corporate tax take of $229 million above forecasts and over $800 million ahead of the same period for last year. The Treasury is putting this down to a recovery in corporate profits following the 2008-09 recession. It pointed to recent profit announcements by a number of listed companies.
This suggests that tax revenue from the corporate sector could well be higher than forecasts in the pre-election economic and fiscal update (PREFU) – forecasts which were at the time criticised for being too optimistic.
Source deductions – mostly personal taxation – fell 5.8%, a variation the Treasury’s accompanying statement said is in line with seasonal fluctuations and should reverse out over the summer months.
GST revenue is also below forecast but this appears largely due to timing of insurance related-refunds for the Christchurch earthquakes and is expected to reverse out over coming months.
Overall, core Crown revenue was just over $500 million below forecast. Government spending was also below forecast, by $267 million, largely due to timing issues related to Auckland rail projects and Waitangi settlement deeds.
Net government debt is at $45.8 billion, or 22.9% of GDP, which is close to the forecast amount.
Rob Hosking
Mon, 05 Dec 2011
Mon, 05 Dec 2011
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Government reaps higher tax from corporates
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